Contents

§ 11.3 GENERAL ACTUARIAL VALUATIONSestates, terms of years, remainders, and reversions, measured by one ortwo lives. These factors may also be used in the valuation of interests in acharitable remainder annuity trust and a pooled income fund. 40• Term-certain tables and tables of one- and two-life valuation factors fordetermining the present value of remainder interests in a charitableremainder unitrust. 41• Tables for computing depreciation adjustment factors. 42The prior-month election rule is explained, 43 including the time and mannerfor making the election. 44 The rules applicable in the case of transfer ofmore than one interest in the same property are summarized. 45 The estate taxrules pertaining to the foregoing are generally identical, 46 as are the gift taxrules. 47There are additional valuation rules in the estate tax context. 48 There arerules for valuing remainder interests in charitable remainder trusts, otherremainder and reversionary interests, other term-of-years and life interests, andannuities; 49 certain actuarial tables are presented. 50 Comparable rules in the gifttax setting have been promulgated. 51As noted, there are specific income, estate, and gift tax rules concerning thevaluation of a remainder interest in property transferred to a pooled incomefund. 52 The one-life actuarial tables are stated in the regulations. 53 Likewise,there are income, estate, and gift tax rules concerning the valuation of a remainderinterest in property transferred to a charitable remainder unitrust. 54The income, estate, and gift tax regulations contain a listing of sections ofthe Internal Revenue Code that are not subject to the monthly interest raterules, 55 and a description of transitional rules for income, estate, and gift taxvaluations. 56In general, for transfers of remainder interests, the present value of theremainder interest is determined 57 by use of the interest rate component on thedate the interest is transferred, unless the prior-month rule is elected. 5840 Actuarial Values, Alpha Volume (IRS Pub. 1457).41 Actuarial Values, Beta Volume (IRS Pub. 1458).42 Actuarial Values, Gamma Volume (IRS Pub. 1459).43 Reg. § 1.7520-2(a)(2).44 Reg. § 1.7520-2(b).45 Reg. § 1.7520-2(a)(3).46 Reg. §§ 20.7520-1, -2.47 Reg. §§ 20.7520-1, -2.48 Reg. § 20.2031-7(a), (d)(1).49 Reg. § 20.2031-7(d)(2).50 Reg. § 20.2031-7(d)(6).51 Reg. § 25.2512-5.52 Reg. § 1.642(c)-6.53 Reg. § 1.642(c)-6(e)(5).54 Reg. § 1.664-4.55 Reg. §§ 1.7520-3, 20.7520-3, 25.7520-3, respectively.56 Reg. §§ 1.7520-4, 20.7520-4, 25.7520-4, respectively.57 Reg. § 25.2512-5.58 Reg. § 1.170A-12(a)(3). 399